Nissan N7 electric sedan (Source: Nissan)
Honda and Nissan are reportedly in talks to discuss a possible merger to help the Japanese companies compete with Chinese EV makers.
According to the BBC, both companies responded to requests for comment with the same statement: “As announced in March this year, Honda and Nissan are looking at various opportunities to collaborate in the future, leveraging each other's strengths.”
As we reported last month, Nissan is in a desperate situation to save itself: the car company is cutting 9,000 jobs, reducing production capacity, and selling its stake to Mitsubishi Motors. The CEO also cut his salary in half.
Chief executive Makoto Uchida – who took over the job amid Carlos Ghosn's massive financial crisis – launched a “sweeping” restructuring plan after announcing the company's biggest loss in the latest quarter. Nissan also sold about a third of its 34% stake in Mitsubishi, freeing up another $482.7 million. Back in the days of Ghosn, Nissan took 34% of the shares of the Mitsubishi company, but even after the sale, Nissan said that it should remain the largest shareholder of Mitsubishi. Its alliance with Renault has invested an estimated $5.2 billion in its EV and battery development plans.
Nissan and Honda in merger talks: report
Back in March, both Japanese automakers agreed to explore an EV partnership, to help them compete in the booming EV market from Chinese competitors.
It appears that Honda is considering several options with Nissan, including a merger, a takeover, or the creation of a holding company, as Automotive News Europe reported this morning.
Of course, combining Japan's number two and three leading automakers can be tricky, as there could be a lot of political scrutiny in Japan due to job cuts. Nissan is also at loggerheads with Renault, which has a 36% stake in the company, but news today says the French company is “open” to Nissan continuing talks to merge with Honda, as reported by Bloomberg.
Either way, both Honda and Nissan have been losing market share in China, which accounted for nearly 70% of global EV sales in November. The world combined sees 7.4 million vehicles by 2023, but strong competition from EV makers such as BYD is a big problem for the two automakers.
Still, some wonder if the merger will make any difference at this point. Jesper Koll, an analyst at Japanese financial trading firm Monex Group told the BBC: “Is this re-arranging the deck chairs on the Titanic in the sense that Honda and Nissan don't really have the products or any technology that global consumers want?”
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